Generating Passive Income and Residual Income: Resources to Utilize

The terms "passive income" and "residual income" actually get tossed around quite a lot - especially when you're discussing online income. Everyone seems to have their own definition. Personally, I think of passive income as income that doesn't require you to be involved in its active generation. That's not to say it's completely hands-free, but it doesn't require perpetual. active participation.

By way of example, consider the guy running the film projector at a movie theater. He's actively involved in things before the movie starts: making sure the right film is on the reels, that the projector is working properly, etc. However, once the film starts playing, he's able to kick back for the next two hours. His active participation is only required at the beginning and end of the movie. Likewise, with passive income, the person earning the money only has to have limited participation in the activity that generates the income. he may have to check in occasionally, but day-to-day oversight is unnecessary.

With respect to residual income (and I must admit that I use the two terms interchangeably), there is usually an initial investment in terms of work needing to be done, but afterwards the income-earner doesn't really have to do anything for income to be generated. Writing a book is a prime example of the residual income method; after the book is published, the author really doesn't have to do anything other than wait for sales to occur and collect the royalties. As long as sales continue, income will continue to accrue without any further effort.

Now that we have the definitions squared away, let's look at some of the resources for earning passive and residual income.

WebAnswers
Question-and-answer site WebAnswers is a place where you get paid to ask and answer questions. I tend to think rather highly of Webanswers because it's the place where I earned my first passive income online, and has been the most consistent for me. I was rather ambivalent when I joined and didn't really have a lot of interest in the site, but despite my own snail-paced efforts I was seeing income within a week. Moreover, Webanswers has produced income for me almost every day since! That's why I tend to think this site should be one of the first ports of call for anyone looking to earn passive or residual income.

(If you'd like to see the income I've been earning on WebAnswers, please visit Squidoo vs. WebAnswers: Comparing Earnings.)

Article-writing is another way to earn passive and residual income. There are many different article-writing sites out there; below are several that I feel merit mention here:

InfoBarrel
With 75% revenue-sharing (and this can go higher under certain circumstances), article submission site InfoBarrel is a great place to earn passive income. There are multiple sources of revenue - for example, AdSense, Amazon and Chitika - plus you can write about any subject your heart desires. In addition, you can submit an unlimited number of articles each day. After WebAnswers, I think article-writing is the next step for just about everyone looking to earn passive income online.

Seekyt
Like InfoBarrel, this is an article site with 70% revenue sharing. A lot of people feel it isn't necessary to post to more than one article-writing site, but I tend to prefer not having all my eggs in one basket. Plus, It's easy to use and it's another venue in which to have additional eyes looking at your writing.

Bukisa
This is another great article site with 60% revenue-sharing. As before, writing articles for more than one site will allow you to diversify your income streams, which is one of the things you should shoot for. Moreover, you should also diversify in terms of how your revenue is generated. Thus, it makes sense to mix article-writing with Q&A sites (like Webanswers), adsense revenue with revenue generated by page views, and so on.

In brief, there's a lot to be said for article-writing, and it's generally one of the ways in which many people get their passive income streams flowing.

Many sites now allow you to create what are basically web pages on any topic you desire. Two of the more popular of these sites are as follows:

Hubpages.com
With Hubpages you construct "hubs" which are basically individual web pages, each devoted to a particular topic. The ability to monetize your hubs (60% revenue-sharing) consists of several methods, such as AdSense and Amazon affiliate links. You can build as many hubs as you can think of, and it's free to join. (Also, building hubs is a lot easier than it might sound. You don't need to know HTML or anything like that. It's pretty simple, in fact, and you shouldn't have any problems.)

Squidoo (Saving the best for last!)
Squidoo is somewhat like Hubpages, except the pages you create are called "Lenses". There's a generous 50% revenue-sharing program(including AdSense and Amazon affiliate links), but it's focused more on how well your lenses rank. (Needless to say, the higher ranked lenses garner more revenue, but that's to be expected.) Again, the lenses you can build are limited, for the most part, only by your imagination. However, you will find that - as always - quality content is the key to success. Therefore, it will be to your benefit to focus on the quality of your lenses, rather than quantity. (And, as with hubs, building lenses is super-easy.)

I think rather highly of both Squidoo and Hubpages. Moreover, I enjoy the fact that the revenue-sharing for them is a bit different (again, diversity of revenue streams is a good thing). If you'd like to see how the two compare to each other, please visit Squidoo vs. HubPages: An Earnings Comparison.)

Social bookmarking is essentially the referencing of content and resources online. basically, you can bookmark anything you find interesting or useful. There are numerous social bookmarking sites, and here are two notable ones:

Shetoldme
This is a social bookmarking site with 100% revenue-sharing. (Tough to beat that!) This is a very popular site with a very good reputation.

Infopirate
This popular and well-regarded social bookmarking site has 80% revenue-sharing. It's not the 100% that you might get elsewhere, but again, there's some advantage to have diversity in your income streams. (Although hindsight is 20/20, think about it in terms of owning nothing but Enron stock a dozen years ago.)

With so much effort and attention focused on the "easy money" to be had via the internet, it's easy to forget that there are tried and true methods of earning passive income offline. In fact, you might view some of these as the original passive/residual income techniques:

Interest-Bearing Accounts
Let's be frank: interest-bearing accounts are barely paying anything these days. However, as my grandparents used to say, something is better than nothing. (Moreover, it does fit the definition of passive income, so I'm tossing it in.) The truth of the matter is that interest rates weren't always this low and they won't stay this way forever. So, while you may not be on the bandwagon right now, it's something to keep in mind for the future.

Dividends
This, in my opinion, is the granddaddy of all passive income streams, and something that is quite often overlooked in this age of fast money. Consider, for example: per Yahoo's finance page, Coca-Cola paid a split-adjusted quarterly dividend of 5 cents per share back in 1990. Today, that same dividend sits at 47 cents per share. That's better than 800% growth! Pretty nice in my opinion... It ain't fast, but it's steady and dependable, and - again - adds diversity to your income streams

Book-writing and other niches
Supposedly everyone has at least one great novel or story inside them. Well, here's your chance to tell yours. The advent of the internet has not only made self-publishing cheap, but almost a preferred option. Using a publisher like CreateSpace.com (Which is Amazon.com's publishing arm) or Lulu.com, it is not only feasible to write your own book, but the out-of-pocket costs can be practically nil. For instance, you don't have to maintain any inventory; publishers like Amazon and Lulu will publish and ship your book as it is ordered - on demand! You simply work on marketing and counting your royalty checks. Needless to say, this is residual income in its true form: up-front work (writing) followed by a lifetime revenue stream (royalties) for as long as your book sells.

Of course, there are many other offline methods of generating passive income - bonds, T-Bills, and so on - so you shouldn't limit your efforts solely to what you find online. Again, you don't have to put all your eggs in one basket. (And if you need to make some quick money, please visit How to Make a Fast $50 Offline.)

Being a landlord is another endeavor in which it is possible to earn some healthy supplemental income. However, I hesitate to call it passive because it's a situation that often requires more hands-on and active management than people sometimes realize.

That said, it can be lucrative if you've got the time, patience and right temperament. Moreover, there are certain things that you simply have to do these days in order to avoid problems down the road: For starters, always run a background check on prospective tenants. Also, to the extent you can, get a home warranty to cover repairs. It'll cost you a few hundred bucks per year, but you have the satisfaction of knowing that for almost any problem you can get an expert to come ut and take care of it for roughly $50 per service call. (When's the last time you had to pay a plumber only $50 to fix a leak?) Last but not least, always get a deposit. No matter what hard luck story they have, don't neglect this part, because sometimes it's the only thing making them behave when the lease is almost up and you want them out.

In short, as long as you go into any real estate venture with your eyes open, you can do very well indeed. Just be aware that the income may not be as passive as you possibly hoped.

You probably have lots of money-making ideas that you'd like to further develop. However, it's often difficult to bring them to fruition or fully capitalize upon them without additional resources. Here are just a few materials that help catapult you passive income results by making you more efficient and productive.

Bluehost
Bluehost is a top-ranked and well-regarded web-hosting company. I use them for several of my own web sites, and I recommend them highly. They provide unlimited domains and unlimited space (which is great for someone like me, since I've got several ideas for niche sites I'd like to develop), all for the low price of $6.95 per month. Of course, it's completely unnecessary, to pay for web-hosting - there are a ton of companies that will let you build sites for free - but as you advance your online business you will often find the need for greater flexibility than you might find for free. At that point, in order to continue your growth, you may find it necessary to go beyond what free sites have to offer. Moreover, web-hosting is fairly inexpensive, to say the least, and for the freedom it gives you with respect to monetizinf and developing your niche, the cost is often a bargain. (Besides, as experience will tell you, there's no such thing as a free lunch.)

Instant Article Wizard
An outstanding piece of article-writing software that performs impressive online research, and will allow you to craft quality content light years faster than you did previously. Writer's block will become a thing of the past, and you will quickly be able to familiarize with subjects you previously had little experience with.

The Best Spinner
Incredible writing aid that helps you create more content than you ever dreamed - all unique and original - for each and every article that you write. It's an extremely useful tool for all of your online writing endeavors.

Unique Article Wizard
Another outstanding piece of software that will exponentially increase your article-marketing efforts. In essence, it allows you to automatically post to hundreds of blogs and article directories. If you are serious about marketing your articles, you will this software to be extremely useful.

Market Samurai
This software is phenomenal in its ability to perform in-depth keyword analysis and research. It quickly identifies high-profit niches that you should focus on, thereby saving you time, effort, and money.

There are probably other great software tools and resources out there in the marketplace, so these are by no means the final words on the subject. The bottom line is that there's no need to go it alone when there are many resources available to make your online earning efforts easier and more priofitable. The key is to find something that works well for you and that you are comfortable with.

You can find out more about all of the aforementioned mentioned resources - and others - at the Passive Pursuit of Income Blog.